The reason that imagination is not number one is that we can always write non-fiction. Not a lot of imagination in that.
Hmm...I have to disagree, I think there's a lot of imagination required to percieve and understand and interpret real life. A simple relation of facts is dull:
1. Went to school.
2. Kids made fun of me.
3. Kid defended me.
4. I was in love.
Not too exciting. But weaving a tale of a first day in class when nothing seemed to go right, everyone told jokes about me and everything was horrible, and I just wanted to hide under my desk and cry until the other new student, a girl I never would have looked at twice, gave up every chance at fitting in and being cool to stand up for me that day and be my friend...well, that's a story. It has meaning and form, and those are not present in any part of factual life.